Notes – December 2016 TBI’s Networking Event

Thanks to everyone who attended The Boston Investor’s Networking event this week!  There were a lot of questions in the Q&A segment that made for some great discussions:

  • What are some things to keep in mind when purchasing a personal property with a 203k loan?
    • Make sure you have a 203k approved contractor lined up
    • You will still need funds to pay contractors as the loan will pay you in arrears of work completed
  • What metrics should you look for in a rental property?
    • Cash flow, ROI, cap rate
    • In addition to quantitative factors, look at the qualitative as well:
      • Tenant quality
      • Location
  • What type of Cap rates do you look for?
    • 7-9% in Boston
    • 10+ in suburbs
  • How do you find properties to buy?
    • Direct mail
    • Networking – building relationships with RE agents, other investors, wholesalers, etc.
  • How do you build a direct mail list?
    • Driving for dollars
    • Tax liens
    • Use listsource for absentee, equity, etc. lists
  • How do you work with an owner who lives out of state?
    • It’s really no different from working with any other type of seller
    • Ask if someone can let you in the property
    • Ask if they want you to send them pictures of the house if they haven’t seen it in a long time
  • What’s more successful, driving for dollars (DFD) or using listsource?
    • The highest quality lists will generally take the most amount of time to acquire
      • Most investors won’t take the time to drive, that’s why DFD is a good list
  • What do you do when you get a returned mailer
    • Skip trace the prospect
      • Use a service like TLO, Beenverified, or Intelius
  • How do you structure a partnership agreement?
    • 50% to person who brings the funds & 50% to person who manages the rehab
    • May want to give one person the majority share so there is no potential for a stalemate
  • How do you find contractors/subs?
    • Ask other investors for recommendations
    • Ask other trades whom you’ve worked with (i.e., ask your painter if they know a good plasterer, ask your plumber if they know a good electrician, etc.)
    • Use Angie’s List or check the BBB
    • Ask a salesperson at a lumber yard or supply house
  • How do you manage your time when you work a full time job?
    • Create systems to become more efficient
    • Find time in your day (work during lunch break, make calls on commute, work in evenings or on weekends)
    • Regardless, it takes a major commitment to invest in real estate while managing a full time job

 

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